Buying Your First House... anyone with experience?

[Buster]

This is the most informative thread ever. Me and Blumeanie have been talking a while about moving out together. We wanted to move to some place small with low expenses to settle up get married and start sharing our bills. I know when we do get married, my grand parents put money in an account for me for this very purpose. We should have around 20k to start with not including money we save ourselves. Is this a bad way to start? Or is there an easier/smarter way?

[MuddyREX]

Ho-kay.

Being that I have bought two homes and worked in the mortgage industry myself, I like to consider myself somewhat knowledgeable on this subject.

Blue4door is throwing out some great info. I agree with just about everything he said, but I wouldn't say to avoid going directly to a mortgage company. Like DolphinS4 said, do avoid mortgage brokers. They represent no actual mortgage company or bank. They'll say something like I'll get you a xx year loan at a x.xx% interest rate with no points, and once you are on board with them, they have to go find a bank to honor it.

I've heard horror stories about people showing up to a closing with a completely different mortgage to sign then they were originally offered. This can be especially bad when you are buying a home since you already have money invested into it by the time closing comes around and it is extremely hard to walk away from.

On the other hand, going directly to a mortgage company can sometimes allow you more flexibility with your loan. Where most banks are tied down as to what kinds of loans they can offer you because they have to adhere to certain government guidelines, some "sub-prime" lenders can do some pretty amazing things that regular banks can't.

All I'm saying is to shop around for a mortgage, and find the one that you are most comfortable with. Read the fine print, and if you don't understand it, take someone with you who does.

As for a downpayment? The less that you borrow in relation to the total value of the home will get you a lower interest rate on your mortgage. It works like a see-saw, interest rate goes down when the downpayment increases, and vice-versa.



Now, as for the other stuff that comes with buying a house, be prepared for a change. There will be more bills than you'll anticipate.

Here's what I'm writing checks for every month for the house:
Mortgage / taxes, phone service, cable, internet, trash removal, electric, water, sewer, alarm service, food, and I know I'm forgetting a lot. You may also have to deal with an association fee, and other fees depending on where you live.

The initial expense once you move in can be pretty high as well, since you'll most likely want to redecorate. The cabinets will be bare, so be prepared to spend a lot of money filling them. You'll also have to furnish the home, and that can get really freaking expensive. I worked in the furniture industry as well, so I know.

Don't forget that you have an expensive hobby called cars.

It all adds up, so be sure to think eveything out before you make your decision.

I'm tired of typing.

[wgknestrick]

Troll give me a call if you want some info on actually what to look for in a house. All this info above is just on the shell game of mortgages.

Nothing said of roof inspection, exterior, utilities, plumbing, heating, or windows. Everyone is just worrying about how to get the money, and trust me that is the easy part. The key is what to spend it on.

Working in the construction business (and not the modern "throw houses" together for a big company business) for 8 yrs has taught me a ton.

All new houses built by "companies" are complete and total garbage. I don't even know where to start, but they cut corners (costs) everywhere at the home owners expense. Buying a house is not like buying a car where "new" = reliable. Absolutely, totally ****ing false.

There are always problems with new houses no matter who the builder was. Throw in these vinyl villages being built like hell (by not a single "master" tradesman) and you get a POS over the next 20yrs.

[wgknestrick]

I was in the plumbing industry (father owned own business). I don't claim to be a master in anything else, but I have done work on my own house in everything else. I also property manage on the side for a couple of rentals.

My ranking of the different areas of houses:

HEAT
1. Natural gas
2. Propane
3. Oil
4. Electric

HEATERS
1. Hot water (radiator) system (very cheap to maintain and efficient)
2. Forced hot air (most popular) (MUST HAVE RIGID DUCTING)
3. Forced hot air with flexible ducting (In almost every new house)
4. Radiant Ceiling

PLUMBING
1. Rigid copper lines
2. New Gray compression style (not sure exact name as it is new)
3. PVC glue fittings + pipe (white)
4. Flexible copper (I've seen this in most newer houses)

Facets
1. Delta-Moen (most popular and can find parts easily- good value)
2. Khoeler -expensive, looks nice, but still good
3. Anything else - throw away facets. They start leaking, throw away, replace with above.

ELECTRIC
1. Make sure box is 150A or bigger (best is 200A)
2. Absolutely no 2 wire / insulator type (usually only is very old houses)
3. Observe general neat-ness of runs going into the box will tell you a lot about the skill of the electrician
4. More ceiling lights the better

Windows:
1. Vinyl tripple pain
2. wood (can be very good if new and of good brand - Anderson, Pella)
3. aluminum (in my house and they really suck)

GENERAL PLUMBING
1. Make sure there are vents for and near every toilet (Check roof for pipes)
2. Floor drains in basement are absolute must (most new houses dont have these) Wait until something leaks bad down there. Should have floor drain by heater/AC/Hot water heater.
3. Make sure there are shut off valves under each sink and for each toilet.

CARPENTRY
Inspect general trim seems and moldings. This will tell you a lot about the carpenter. Look at the joices in the basement, inspect for uniformity, bowing, height of joice (taller joice = better), etc. Also make sure there are no slumping sections in the roof as this is a sign of weakness.


My big advice is also to ignore all paint/carpet/wallpaper/paneling and any other minor aspect of the house. All this **** will be changed anyways over the next 10yrs and there is absolutely no reason to turn away from a great house, just because of the previous owners bad tastes. This way you replace it with exactly what you want.

Also is a good idea to make a list of projects you can do yourself (or have family connections that could do them) to try to walk into a good deal. Some houses have problems which might be fixed easily for much less money than that problem detracts from the houses value.

STYLES OF HOME
1. Single dwelling homes
2. Condo
3. Twin
4. Town house

You can never, ever go wrong with a "house" This is the only one garanteed to always appreciate in value. Any other will stay even, lag behind depending on the neighbors. Example, it only takes a couple of ghetto families to ruin a town house plan. With town houses, you are always going to have people sharing a wall with you that you have no control over.

[wgknestrick]

Try to buy a house from the following decades in this order based on general construction practices:

1. 60s
2. 50s-40s
3. 70s
4. 80s
5. 90s
6. Anything else older or newer

For reference, I bought a 1970s house back in 2000. Payed $120K for it. It needed some work. Put 20% down. Houses in my neighborhood are now selling for $180-200K. I currently have a 15yr mortgage with $80K left on principle. Mortgage payments are $970/month. I'm 29 and have 50% of my house paid for.

This is the key decision that will pay off for the rest of your life.

[poolmike]

Pam and I bought our place 7 years ago. The monthly bills can be shocking, but totally in our control. When money is tight, I just eliminate stuff that is optional. It is well worth it.

[MuddyREX]

Wkenestrik has some extremely valid points. My posts were more towards the money side since Troll asked for information on "costs" so he could see if it would work in his "budget".

But since we have gotten to this point...

As said above, a home inspection can be priceless. Case in point - one of my brothers was in the buying process on a home that he absolutely loved. The home inspector noticed a minor sag in the ceiling and discovered that the current owners had removed a load bearing wall and cited it on the report. My brother did not buy the home, and a portion of the 2nd floor collapsed into the 1st floor a few months later.

Along with stuff like that, a good home inspection will give you an idea of the actual condition of the home and it's components. You'll get a general picture of what may need to be replaced in the near future. This can give you some leverage when you ask the sellers to repair/fix certain things before closing, or want to negotiatie the price.

[noclutch]

I bought my place 1 1/2 years ago with a ~105% loan, ended up paying about $1000 in closing costs total which was nice. Good credit is extremely important, search around the web for ways to clean up your credit for free if needed.
I did an 80/20 loan. Reason bieng, I wanted a lower minimum payment. Every month I pay an extra 2-400 on each one. If money ever gets tight, I can just make the minimum, interest only payment.

[MPowerKai]

Originally Posted by Buster

This is the most informative thread ever. Me and Blumeanie have been talking a while about moving out together. We wanted to move to some place small with low expenses to settle up get married and start sharing our bills. I know when we do get married, my grand parents put money in an account for me for this very purpose. We should have around 20k to start with not including money we save ourselves. Is this a bad way to start? Or is there an easier/smarter way?

Depending on how much you guys pull in a month and how much the house your looking for costs it's very possible however you should definately check out all aspects of everything first

[wgknestrick]

I also say stay away from all of these "modern" mortgages. They are the main reason for the housing boom and bust.

You are loaning money, that money HAS to be paid back.... BY YOU (important part). If it sounds too good to be true, well you know. Also think of the term periods. If your term is X years and you weren't born X years ago, it is time to lower your loan amount. (Only use this to put the term into perspective you 40+yr mortgagers)

In general, you should (and most likely will) spend the same money on a house per month as you do renting. Only catch is you are throwing money away renting, while investing it, owning a house.

[wgknestrick]

Originally Posted by Buster

This is the most informative thread ever. Me and Blumeanie have been talking a while about moving out together. We wanted to move to some place small with low expenses to settle up get married and start sharing our bills. I know when we do get married, my grand parents put money in an account for me for this very purpose. We should have around 20k to start with not including money we save ourselves. Is this a bad way to start? Or is there an easier/smarter way?

No this is about the best way to do it. With this much you should be able to swing something so you don't have to pay PMI (which is the biggest of all insurance scams).

I started coming out of high school with X dollars in an account for college. I choose to go to Penn State for the discounted in state tuition costs and worked interns every summer. When I graduated, I had around $25K left to either buy a car, or put into a house. Luckily my father convinced me to go for a house.

I was very fortunate to have a family that took care of me financially AND also teach me the discipline to use it wisely.

[italianblaze]

hey troll my dad runs his own contracting business and he knows his stuff bin doin it all his life if you gota property he could build you a house and it would be alot cheaper than buying a house, or i could have him check out the house your intrested in on the weekends for free jus aim me if you want

[PotenzaSub]

All I know is that it's a great time to buy. My house has been on the market for a year. We had to lower the price by almost a 1/2 million.

[wgknestrick]

Originally Posted by PotenzaSub

All I know is that it's a great time to buy. My house has been on the market for a year. We had to lower the price by almost a 1/2 million.

I can't really say I feel sorry

[wrx_snobordr]

Great thread! I am in the same boat as troll and have been looking for many of the answers you all provided so thank you. Keep the info flowing!

I am planning on buying in the next year. Can you guys recommend some nice areas with good construction, 60s 70s... as wgknestrick describes is the most sound construction? Can someone go a bit more into detail on what is avialable for the first time buyer.

Thanks

[PotenzaSub]

Originally Posted by wgknestrick

I can't really say I feel sorry

and why is that?

[italianblaze]

someones getting called out,
anyway lets keep positive thoughts on this thread people and stay focused to the topic

[SUB2.5RS]

I think its good to have someone that really knows their stuff to look at the house before buying it. O and have money for the closing costs. They want mad money for some stupid stuff. Enjoy, having a is great.

[Sincere]

Originally Posted by wgknestrick

I was in the plumbing industry (father owned own business). I don't claim to be a master in anything else, but I have done work on my own house in everything else. I also property manage on the side for a couple of rentals.

My ranking of the different areas of houses:

PLUMBING
1. Rigid copper lines
2. New Gray compression style (not sure exact name as it is new)
3. PVC glue fittings + pipe (white)
4. Flexible copper (I've seen this in most newer houses)

Facets
1. Delta-Moen (most popular and can find parts easily- good value)
2. Khoeler -expensive, looks nice, but still good
3. Anything else - throw away facets. They start leaking, throw away, replace with above.

GENERAL PLUMBING
1. Make sure there are vents for and near every toilet (Check roof for pipes)
2. Floor drains in basement are absolute must (most new houses dont have these) Wait until something leaks bad down there. Should have floor drain by heater/AC/Hot water heater.
3. Make sure there are shut off valves under each sink and for each toilet.

I would like to just add/conflict some things here. My fianceworks at a plumbing office, her father & brother are both plumbers, she knows just about everything there is to know, and she got a little mad at some stuff here.
1st of all...the plumbing pipes you are listing are water lines only. Clearly L Type Copper(rigid as u called it) is the best for water, PEX piping(the 2nd one that you didnt know the name of) is horrible, BUT it is the cheapest for builders to use, so they go with it. The WORST is PVC water lines, STAY AWAY from those. For drains, the most common you will see is PVC which is perfectly fine for that. I just don't want people seeing PVC in a home they're looking at and thinking its junk. for drains, its good.
2nd....Moen, Delta, Kohler, and Grohe are all common good faucets with parts easy to come by. The ONE manufacter that is absolutly horrible is Price Pfister. Any other brand you see would probably be an overseas company which simply makes parts hard to come by.
3rd...Vents are manditory per code in almost every township, so if you have an inspector, thats not an issue. I do agree that shut offs at EVERY fixture is completely important.
Lastly, one major thing to look into is public water/sewer. Wells are NOT fun, granted, you do not have to pay a water bill quarterly, but if you lose your electric, you lose your water, thats no fun. If it does have a well, check to see what kind of pump it runs off of(submersible-in the well, jet pump-in the basement/crawlspace). They can be VERY costly to replace and can also be high maintenance. Septic systems are also not much fun, if a pump goes bad, alarm goes off, you have to pay to get it pumped just so a plumber can pull the pump and diagnose, NOT FUN. This is something very important though because its not cheap to change to public(if its even availible to you) Can range from 3000-10000 in township fees and thats just for them to give you the okay THEN you have to pay someone to run the lines for you. AND thats just the cost for one or the other. This was the first thing we look at when looking for new homes.

Sorry so long, just getting some of my/my fiance's knowledge out there.

[wgknestrick]

Originally Posted by wrx_snobordr

Great thread! I am in the same boat as troll and have been looking for many of the answers you all provided so thank you. Keep the info flowing!

I am planning on buying in the next year. Can you guys recommend some nice areas with good construction, 60s 70s... as wgknestrick describes is the most sound construction? Can someone go a bit more into detail on what is avialable for the first time buyer.

Thanks

Just look for nice older neighborhoods. Stay away from busy roads and bad school districts (critical for resale).

I've always been a fan of brick (just read 3 little pigs) or watch tornado footage. You never see a tornado tear apart a bunch of brick/stone homes. Brick has zero upkeep, always looks nice, never needs replaced, etc. This is ALL brick, not just a brick front or half brick/siding.

Never ever buy exterior wood paneling (or anything that needs exterior paint). Spend $1K on paint alone every 8years and 2 weeks of labor.

Think small (<1500sqft) for your first house because you have to cool and heat all that space. You really don't need a ton of room unless you have a huge family.

Don't ever buy a house with the 5 yr mentality. You WILL be there for longer than 5 years. If not, you shouldn't be buying.

I don't like buying houses with pools (unless you really, really want it and know what kind of upkeep is involved)

If single, rent out spare bedrooms. I got an extra $700 cash per month for a little while. It is much harder to put up with people abusing your **** though.

Attached garage is huge +, 2 car is my minimum size. Anything less is tough to fit a car in a 1 car garage with tools int. Poll buildings, sheds, etc all +s

If you aren't handy or consider yourself "lazy", a town home/apartment/condo is for you. If mowing grass/trimming trees/painting/etc is a huge project to you, don't buy a house.

If you are ever tempted by a house you feel is a good fit for you, don't hesitate to make and offer. The seller has to take it off the market while you negotiate and you are not forced to buy it. You can buy some time this way and protect your house.